The country will in the next three years see community development funding reach R240.7 billion, Finance Minister Tito Mboweni has revealed.
This function facilitates access to housing and basic services and affordable public transport. It also supports spatial transformation and urban development.
Over the medium term, total expenditure is expected to grow from R211.5 billion in 2020/21 to R240.7 billion in 2023/24.
In its 2021 Budget Review, the National Treasury said due to water, sanitation, electricity, housing and public transport functions being delivered by municipalities, provinces and public entities, they, transfers and subsidies are the largest share of expenditure in this function.
“Transfers to the local government equitable share remain the largest spending item, in order to fund municipalities to provide free basic services for low-income households and subsidise poorer municipalities. As a result of once-off allocations to support municipalities in 2020/21 and spending reductions, the equitable share will decline by 0.4 percent over the medium term,” reads the report.
Treasury said the Passenger Rail Agency of South Africa continues to face significant financial imbalances.
Persistent capital budget underspending and growing operational deficits as a result of vandalism of rail infrastructure, alongside a significant decline in passenger ridership, meant the agency had large cash balances for infrastructure with insufficient funds to run reliable services.
“As a result, capital transfers are reduced by R5.4 billion over the medium term to allow the use of existing capital funds,” the department said.
New conditional grants to provinces and municipalities to upgrade informal settlements will be introduced in 2021/22.
The report said communities and community-based organisations will lead the planning and design of upgrades, with R24.8 billion allocated over the medium term to secure tenure and provide basic services in 900 informal settlements by 2024.